Regional downstream logistics firm Titan said that had Grand China Logistics made the payment promptly, Titan would have been able to meet its debt repayment obligations of $105.87m in principal amount in senior notes which will mature on 19 March, and preferred shares redeemable at $39.85m at any time from 22 June.
Titan added that under such circumstances, it does not expect to repay the senior notes when they mature on 19 March.
“While the company has received RMB740m towards the proposed disposal, it has not received the balance of payments (RMB972.05m) which were due by 31 December 2011,” Titan said in a statement.
Titan had entered a sale and purchase agreement to dispose 95% equity in Titan Quanzhou Shipyard and the issue of 500,000,000 subscription shares to Grand China Logistics.
The proceeds from the sale and purchase agreement were earmarked for Titan to reduce its debts, and to fund the development of business and working capital.
Titan said it is “actively working to require Grand China Logistics honour its obligations”. Titan will continue to seek new equity and/or debt funding options to resolve the group's current situation and honour its financial obligations.
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